Michael Lacey, a founding father of the profitable categorised web site Backpage.com, was sentenced Wednesday to 5 years in jail and fined $3 million for a single cash laundering depend in a sprawling case involving allegations of a yearslong scheme to advertise and revenue from prostitution via categorised adverts.
A jury convicted Lacey, 76, of a single depend of worldwide concealment cash laundering final 12 months, however deadlocked on 84 different prostitution facilitation and cash laundering costs. US District Choose Diane Humetewa later acquitted Lacey of dozens of costs for inadequate proof, however he nonetheless faces about 30 prostitution facilitation and cash laundering costs.
Authorities say the positioning generated $500 million in prostitution-related income from its inception in 2004 till it was shut down by the federal government in 2018.
Lacey’s attorneys say their consumer was centered on working an alternate newspaper chain and wasn’t concerned in day-to-day operations of Backpage.
However throughout Wednesday’s sentencing, Humetewa informed Lacey that he was conscious of the allegations towards Backpage and did nothing.
“Within the face of all this, you held quick,” the decide mentioned. “You didn’t do a factor.”
Two different Backpage executives, chief monetary officer John Brunst and government vice chairman Scott Spear, additionally have been convicted final 12 months and have been every sentenced on Wednesday to 10 years in jail.
Prosecutors mentioned the three defendants have been motivated by greed, promoted prostitution whereas masquerading as a professional categorised enterprise and misled anti-trafficking organizations and legislation enforcement officers concerning the true nature of Backpage’s enterprise mannequin.
Prosecutors mentioned Lacey used cryptocurrency and wired cash to international financial institution accounts to launder revenues earned from the positioning’s advert gross sales after banks raised issues that they have been getting used for unlawful functions.
Authorities say Backpage staff would determine prostitutes via Google searches, then name and provide them a free advert. The positioning is also accused of getting a enterprise association during which it will place adverts on one other web site that lets clients put up opinions of their experiences with prostitutes.
The positioning’s advertising director has already pleaded responsible to conspiring to facilitate prostitution and acknowledged that he participated in a scheme to offer free adverts to prostitutes to win over their enterprise. Moreover, the CEO of the corporate when the federal government shut the positioning down, Carl Ferrer, pleaded responsible to a separate federal conspiracy case in Arizona and to state cash laundering costs in California.
Two different Backpage staff have been acquitted of costs by a jury on the similar 2023 trial the place Lacey, Brunst and Spear have been convicted of some counts.
At trial, the Backpage defendants have been barred from mentioning a 2013 memo by federal prosecutors who examined the positioning and mentioned on the time that they hadn’t uncovered proof of a sample of recklessness towards minors or admissions from key individuals that the positioning was getting used for prostitution.
Within the memo, prosecutors mentioned witnesses testified that Backpage made substantial efforts to stop legal conduct on its web site and coordinated such efforts with legislation enforcement businesses. The doc was written 5 years earlier than Lacey, Larkin and the opposite former Backpage operators have been charged within the Arizona case.
Supply hyperlink
